Advertising Law Blog

According to published reports, in response to a controversial business practice by the Better Business Bureau (BBB), in which higher grades are given to businesses that pay for accreditation, Connecticut Attorney General, Richard Blumenthal, has threatened to take legal action. This is in addition to a recent lawsuit challenging the practice as well as a 20/20 expose.

The "alpha" grading method, which assigns a business with a letter grade-ranging from F to A plus-began in 2007 as a way to simplify consumer business decisions. The original system, which simply denoted a business as "satisfactory" or "unsatisfactory," was the subject of many consumer complaints. However, recent investigations of the new practice have revealed that business grades are assigned in a manner inconsistent with business history. In many cases, accredited businesses with little to no financial record were awarded generous rankings whereas similar, yet unaccredited businesses are limited to average rankings. As reported, Blumenthal questioned both the reliability and effectiveness of the BBB's current practice, demanding that consumers are made aware of the positive effects that paid accreditation can have on business grades, or else that the practice is stopped entirely. Blumenthal also recommended a consumer-controlled rating system in favor of the bureau's current self-delineating ranking system.

The BBB is also facing scrutiny by TicketNetwork, Inc.-a marketing and software solution company that recently filed suit against the bureau for failing to uphold its basic principles of equity and objectivity. TicketNetwork, like Blumenthal, claims that statements on BBB's website are in complete contradiction to the current business evaluation method.

In an ABC 20/20 investigation released on Friday, November 13, 2010, an ABC producer probed further into the grading issue by personally approaching small business owners in order to alert them of the BBB controversy, and to explain how their business ranking could be drastically improved by paying a fee. In all cases, the business rankings were improved from the C range to an A plus within one business day, simply by having the business accredited.

The disadvantage of forgoing the fee is not limited to small businesses, however. Many large businesses, including the Ritz Carlton Hotel and Wolfgang Puck's food products and restaurants have received F grades for a negligible amount of consumer complaints, simply because they have not joined the BBB.

Companies who have found themselves victim to what they believe to be an unfair practice- pay a hefty membership fee in order to get a high ranking - may have finally found some relief.